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SAPPI LIMITED - SALE OF TIMBERLANDS IN THE USA

Release Date: 07/10/1998 13:57
Code(s): SAP
Wrap Text

IN ACCORDANCE WITH SAPPI'S PREVIOUSLY ANNOUNCED PROGRAMME TO DISPOSE OF
NON-CORE ASSETS TO REDUCE DEBT, SAPPI FINE PAPER NORTH AMERICA HAS SOLD 360 000
HECTARES OF TIMBERLANDS IN MAINE, USA FOR A CONSIDERATION OF US$ 180 MILLION,
EQUIVALENT TO APPROXIMATELY R1,1 BILLION TO PLUM CREEK TIMBER COMPANY, LP
("PLUM CREEK"). SUBJECT TO THE REQUIRED REGULATORY APPROVALS, THE SALE IS
EXPECTED TO BECOME EFFECTIVE BY THE END OF 1998. THE DISPOSAL WILL HAVE NO
MATERIAL EFFECT ON SAPPI'S NET ASSET VALUE OR EARNINGS PER SHARE. THE PROCEEDS
OF THE REALISATION WILL BE USED PRIMARILY TO REDUCE DEBT.

AS PART OF THE TRANSACTION PLUM CREEK HAS AGREED TO A FORTY YEAR CONTRACT TO
SUPPLY WOOD FIBRE TO SAPPI.